The latest figures show that 10,294 individuals were declared insolvent in the first quarter of 2004 compared with 8,117 for the same period last year.

Figures published by the Bank of England last year showed that personal debt had soared to a record £10bn, increasing 13% on the previous year growing by the fastest pace since 1990.

There was far better news for companies, with just 3,155 businesses in England and Wales going belly up in the first quarter of 2004, a decrease of 4.6% on the previous quarter and a decrease of 14.3% on the same period a year ago, when the figure totalled 3,682.